The former. In animal farming, they measure "food conversion ratio" i.e. they want animals that will get as close as possible to turning 1kg of food into 1kg of body weight. Some animals within the same type can vary in this value. I've often wondered if something similar happens in humans.
No-one said monitoring and reducing your calories is easy, but it is simple.
What precisely do you mean by Calories in/Calories out? Do you mean the very basic observation that eating significantly more or less than you eat today will help increase or decrease your weight, all things being equal? This is clearly true, but doesn't explain why some people naturally overeat, while others naturally undereat, and why overeating has been significantly increasing all over the world.
Or do you mean that people gain a pound for every 3.5k Cal that they eat? Because these sorts of numbers are pure gunk - there is huge variance between individuals in terms of how much overeating will cause how much weight gain. The relationship is also highly non-linear.